Wednesday, March 30, 2005

Drug store blues

If I've read the commercial real estate markers right, there's a new Duane Reade drug store coming to the corner of Broadway and 57th street. Of course, there's already a Duene Reade on this corner, and one a block away at 58th and 8th. But that's not stopping the company from opening another one in this apparent epicenter of pharmaceutical consumption. Crack dealers can't even work the same corner profitably. How come Duane Reade can?

It is the most extreme example of a nationwide phenomenon of drug stores multiplying with an obscene, bunny-like promiscuity. Even when I lived in Tucson, I was astounded by all the new Walgreen's going up, opening faster even than predatory paycheck loan cabanas. How can the market sustain all these drug stores? It seems to be a dark commentary on the profit margins involved in the drug industry, or at least on the ways in which retailers can piggyback frivolous purchases on the necessary medicine purchases people must make. LIke paycheck-cashing kiosks, drug stores can apparently make money anywhere they choose to open; they have a kind of captive market that can freely predate upon. The typical drug store is like a Wal-Mart in miniature, or a steroidal five-and-dime with all sorts of sundry goods available, from groceries to truck-stop-caliber CDs and cassettes to makeup to toys to liquor to stationary. They behave as though they are the only store in a fifty-mile radius, even though there is often another store just like it in the next shopping center down the boulevard (or at the next corner for those cities that still have pedestrians). Maybe I'm not in the demographic for drug stores, but no one I know is ever excited or relieved to see another drug store open. It usually just seems like a waste of commercial space that could have gone to something your neighborhood really needs (like a Trader Joe's or something). Like fast-food restaurants, the drug stores seem to muscle out other potential businesses and reduce commercial strips to the bland sameness of cheap-apartment wall-to-wall carpeting. It seems like we're edging closer to the logical endpoint, where nothing will exist but drugstores, and all commodities will be perceived as drugs themselves, each in their own way.

1 comment:

  1. This is a similar "swarming" strategy that Starbucks has employed in it's domination of the coffee shop business (though, they tend to use a less viral-sounding euphemism). Anyway, the point really isn't about profitability of any individual stores (in fact, frequently, there are so many Starbucks around that they tend to take business from each other), the point is to dominate the landscape so much that opening anything other than a Starbucks amounts to suicide.

    The same principle applies to the big name drugstores. One Walgreens can afford to lose money to another Walgreen (especially, b/c in the end it all goes to the same place). However an independent drugstore can not afford to keep losing business to the other 3 Walgreens around it.